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Whew. We finally finished our taxes. I'd like to THANK everybody on this board who helped me with all my questions. As it turned out, my husband had enough withheld, and we had so many deductions that I didn't have to kick in as much money as I thought.

Which left me with a huge chunk of change in my savings account, which in turn ended up being our joint tax refund. So my husband is happy. I'm happy. He never thought about the fact that I was socking away all this cash throughout the year to pay taxes, so that even though we wouldn't get any money back from Uncle Sam, we will get a refund (except I've been earning interest).

So now our discussions have shifted to what to do with that money. I suggested taking $3500 and funding my 2004 ROTH. We haven't decided what to do with the rest of it -- maybe we'll go to the Falklands this winter to play with penguins.

DH asked me why don't I set up an SEP. My thoughts were I could do that for 2005, but I think a ROTH is a better place to put the money because a) we've already done the return and b) it will grow tax deferred and c) I can take it out in five years w/o a penalty if I want and d) it's such a small amount.

I mean, given a choice, what do you think is better? I think a self employed person should do both, but fund the ROTH first. So even for 2005, I would fund my ROTH first, then put the rest of the money into a SEP. DH thinks I should do the SEP now for 2004. Shouldn't most self employed individuals always fund a ROTH first?

Am I thinking clearly on this or am I missing something?

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